Absorption Rates, What’s Hot – What’s Not

The real estate market in the metro DC area is generally strong, and the inventory of homes on the market in the metro DC area is near historically low levels. That means there are plenty of buyers who are frustrated by their lack of choices. But that doesn’t mean that supply is tight everywhere in every price range.

Among the indicators we track to judge how the market is doing is the “absorption rate,” simply the percentage of homes on the market that are going under contract every month – those that are being “absorbed.” The higher the rate, the more leverage sellers have; lower rates tilt the scales in the favor of buyers. We segment rates this way:

The overall absorption rate in the metro area is just above 30%, indicative of a seller’s market. But market conditions can vary widely in neighboring communities, even within the same geographical area, depending on price and property type. Looking at rates over the last four months to assure consistency, here are five examples of how different things are for properties in the same price range:

Before joining McEnearney Associates in 1996, David was the owner and Principal Broker of his own real estate company for 12 years. David was the Managing Broker of our McLean office from 1996 - 2010, and was named our Chief Information Officer in September, 2010. In that role, he is responsible for the firm' technology, market information and public relations, and is the author of our MarketWatch newsletter. He is also Principal Broker for McEnearney Associates in Maryland, and is an Associate Broker in Virginia and Washington, DC.